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Small Cap Growth ETF (IWO) Hits New 52-Week High

For investors seeking momentum, iShares Russell 2000 Growth ETF IWO is probably on radar now. The fund just hit a 52-week high and is up more than 261% from its 52-week low price of $135.01/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

IWO in Focus

IWO provides exposure to small cap stocks whose earnings are expected to grow at an above-average rate relative to the market. Holding 1168 stocks, it is well spread across securities with none holding more than 0.51% share. The fund has key holdings in information technology, healthcare, industrials and consumer discretionary. It charges 25 basis points in annual fees (see: all the Small Cap ETFs here).

Why the Move?

The growth space of the small cap segment has been an area to watch lately given that U.S. bourses are scaling multiple highs amid Trump upheaval. Geopolitics and Brexit uncertainty have made shifted focus to small cap stocks which are the biggest beneficiaries as these are closely tied to the U.S. economy and not highly exposed to the international market. Additionally, the Fed’s more dovish stance than market expectations and renewed strength in the greenback have supported the rally in small caps. Further, growth stocks tend to outperform in a trending market (a market characterized by a prolonged uptrend).

More Gains Ahead?

Currently, IWO has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely some promise for those who want to ride this surging ETF a little further.

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ISHARS-RS 2K GR (IWO): ETF Research Reports
 
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